France's new budget outline is the most austerity-driven in recent history. But how will this play out politically?

Christine Ockrent guardian.co.uk, Tuesday 2 July 2013 15.45 BST

It used to be a parliamentary tradition. Before the long summer break that the French are accustomed to, the government would report on the evolution of the ongoing budget – tax receipts on one side, public spending on the other. Of course the figures would never match the original estimates. With the noble exception of Raymond Barre, who actually did balance the budget in the early 1970s, the French public deficit has been merrily and steadily escalating, under conservative governments as much as under socialist ones. It now amounts to 56.6% of GDP, the highest of all OECD countries except Denmark.

This time around, the government has refused to present to parliament the "collectif budgétaire" – an emergency mid-year budget to tackle the shortfall in tax receipts. It has a good excuse: the 2013 budget had been set up under the 3% deficit target that President Hollande had promised to abide by before obtaining a two-year extension. In the meantime, recession has settled in, erasing the low growth rate the ministry of finance had been counting on.

Last week, the opposition trumpeted a shocking figure: this year's deficit would reach €80bn instead of the €61bn authorised by parliament. Commentators had already written it off as another blunder in the government's catalogue of errors before realising that different criteria had been used. The opposition had stuck to the 3% deficit rule instead of adjusting its figures to the 3.7 % authorised by the European commission until 2015.

Last Thursday, the French court of auditors officially warned the deficit target would not be met: it would reach 3.8 – 4.1% this year, assuming a 0.1% economic growth rate. The court recommended that €28bn be saved over the 2014-2015 period, listing a series of recommendations that reads like a socialist government's nightmare. Not only will structural reforms have to be more forcefully driven through, but more than two-thirds of the savings have to come from cuts in public spending.

First and foremost, social welfare programmes covering pensions, health and unemployment benefits have to be curtailed; 10,000 civil service jobs need to be cut; the education department, with its huge workforce which happens to be the pillar of the socialist electorate, has to be trimmed down.

The prime minister's office published a perfunctory statement about the court's "extremely pessimistic hypothesis", but immediately issued an outline of what the 2014 budget would be: €14bn is to be saved. This time, specific areas of public spending are targeted. Several government departments will endure cuts: 7% less for the environment, 5.4% less for agriculture, 2.8% for culture. Publicly funded agencies– from Météo-France to CNRS, the scientific research centre – will be hit. The budget outline, which the national assembly is due to examine today, is the most austerity driven in modern French history.

What remains to be seen is how this plays out politically. After the rather pathetic verbal jousting between François Hollande, his volatile minister Arnaud Montebourg and the European commission president José Manuel Barroso, the French president will have to explain what his policies are going to be in such extreme economic circumstances. True to his escapist self, he has already promised that civil servants would not be used as "an adjustment factor". The verbal balancing act goes on. But the figures will stick.

Marine Le Pen, the leader of France’s far-right Front National, is expected to face charges for incitement to racial hatred in France, after the European parliament voted to lift her parliamentary immunity.

The French state prosecutor in Lyon had asked the European parliament to lift Le Pen’s protection from prosecution as an MEP so she could face charges over a speech in 2010 in which she likened Muslim street prayers to the Nazi occupation of France.

The case threatens to upset Le Pen’s careful public relations strategy since taking over the party from her father, Jean-Marie Le Pen. She had sought to project a modern, more palatable face of the far-right in France, free from the type of comments about the second world war and Holocaust denial that have seen her father convicted in court.

Last year, Le Pen Sr was convicted of contesting crimes against humanity for saying the Nazi occupation was not “particularly inhumane”.

Marine Le Pen, who has been an MEP since 2004, this week called herself a dissident who was being pursued for political reasons for a “crime of opinion” and said she stood by her comments.

In December 2010, during her party’s internal leadership campaign, she made a speech in Lyon that denounced Muslims holding prayers in the streets – at a time when a lack of mosques in France had forced many to pray outside. She likened the outside prayers to an occupation and added: “For those who like to talk about world war two, to talk about occupation, we could talk about, for once, the occupation of our territory. There are no armoured vehicles, no soldiers, but it is an occupation all the same.”

On Monday on French TV she repeated her comments, saying she was being targeted “for having dared to say what all French people think, that street prayers – which I must add continue to happen on French territory – are an occupation”. But she did not explicitly evoke the second world war parallel.

The Front National is currently at a high in the opinion polls, after a high score in a byelection in Villeneuve-sur-Lot in south-west France, where the party knocked out the Socialists and scored 46% of the vote in the final round.

A recent poll for YouGov about voting intentions in the European parliament elections next year put the Front National one point behind the traditional rightwing UMP, and ahead of the Socialist party.

In interview with the Guardian, chancellor promotes merits of Germany's dual system of schooling and work experience, and says she regrets impact of eurozone crisis on young people

Kate Connolly in Berlinguardian.co.uk, Tuesday 2 July 2013 17.00 BST

Angela Merkel has said youth unemployment is the biggest crisis facing Europe and urged other governments to do more to copy the German system – concentrating on apprenticeships and not simply academic study – to prevent the emergence of a "lost generation".

In an interview before a summit to tackle joblessness among young Europeans, the German chancellor said her country's tried and tested dual system – a mix of classroom learning and on-the-shop-floor work experience – was the best way forward at a time when almost six million under-25s in Europe are out of work.

"Youth unemployment is perhaps the most pressing problem facing Europe at the present time," she told the Guardian and five other European newspapers. "We in Germany have learned a lot from successfully reducing unemployment by means of structural reform since reunification and we can now bring that experience to bear."

Twenty European Union heads of state and all of the bloc's 28 labour ministers have descended on Berlin to hammer out concrete measures to deal with the problem. Economists say the young generation faces the very real prospect of ending up worse off – materially, professionally and socially – than their parents because of the evaporation of jobs in Europe.

Hundreds of twentysomethings have told the Guardian of their endless job frustrations: receiving rejections because they are overqualified, writing scores of unanswered letters, unable to build a life without a job to structure it around.

Merkel has been blamed for compounding the situation by insisting that southern European economies balance their books rather than spend money on job-creating policies. But she dismissed the suggestion that her jobs drive was a way of boosting Germany's poor public image abroad three months before she faces a general election.

She said the Berlin conference on Wednesday was about best practice, pointing out that Germany had halved its youth unemployment since 2005. "We are now in a position to offer a place on a [dual system] training programme to every young person who wants one," she said. "That wasn't always the case … One thing that experience taught us is that there is of course no need for any country to introduce the whole dual system straight away. Inter-company vocational training can be an alternative.

"We should not just try to make our young people more academic," she said. "Germany is seeing the positive effects of skilled workers and master craftsmen having an excellent reputation too."

Merkel exhorted young Europeans as well as employers to become more flexible, calling for greater mobility in Europe. She said that with language barriers often preventing mobility, she wanted to open up the Erasmus exchange programme to include vocational training.

Five years of economic crisis have prompted thousands of Europeans to migrate in search of work. Southern Europeans are now coming to Germany in record numbers, and Merkel quipped that while not all of them would enjoy the conditions offered to the Spaniard Pep Guardiola as Bayern Munich's new coach, they would be given good chances in Germany.

"We have no intention of expanding the low-wage sector, as there is a great demand for skilled workers, which cannot always be met by Germans, although they remain of course our first priority. To reiterate, Europe needs a more mobile labour market. To that end, the way students and academics move around the single market as a matter of course could be better reflected among skilled workers."

She stressed that contrary to widespread accusations that Germany was trying to impose its ideals and economic models on souther European countries, she did not expect everyone to conform to the strict German model.

"It's absolutely fine for a country to want to structure its economy in a completely different way to Germany's," she said. "I'm always pleased to see different roads leading to success. But what nobody can negate is the need to be competitive and to work for and earn prosperity. When I look at Italy, Spain or Greece I do see very different, successful industries.

"What is crucial is that we all realise how much the world has changed. China, India, Brazil, South Korea and many other countries have been competing with us [Europe] for quite some time in areas we used to dominate … We either offer those parts of the world attractive and innovative products, or we resign ourselves to losing market shares and therefore prosperity, which is precisely what I do not want, either for Germany or for Europe".

Speaking on the sixth floor in the cuboid chancellery in Berlin, with its sweeping views over the Tiergarten park and the sea of cranes that continue to reconstruct the German capital almost 23 years since reunification, Merkel said it was up to governments to solve the problems so as to prevent the social unrest that has been increasingly visible on the streets of southern European towns and cities in recent years.

"When things start to become dysfunctional, it is the job of politicians to remedy the situation. Youth unemployment has been much too high in some countries for many years and now the crisis has driven it even higher. That is unsustainable in a continent with an ageing population. We must not allow there to be a lost generation".

Merkel said the plight of young people was one of her major regrets about the crisis. "I am sorry that it is often those who had absolutely nothing to do with those wrong turnings, the young or the poor, who bear the brunt of the hardship today … It is highly regrettable that parts of the economic elite assume so little responsibility for the deplorable situation."

Highlighting another cultural difference between the approaches taken to the crisis by Germany and other parts of Europe, Merkel said the word "austerity" had entered her vocabulary for the first time only after the crisis had been well under way, as she preferred the term "sound budgeting".

"I see no dichotomy between sound budgeting and growth," she said. "The road we have now started on is therefore the right one, with budget consolidation on one side and fundamental structural reform on the other. That is what will bring sustainable growth."

Asked whether she had ever personally faced the worry of being out of work, Merkel – the daughter of a protestant pastor who moved his family to communist East Germany when she was six weeks old – said: "Fortunately not. In the first few years when I became a politician, I did sometimes think about what I would do if my political career suddenly came to an end.

"I imagined running a jobcentre," she said. "It's a pleasant task to help people find work."

She said her experience as an MP since 1990 in the northern state of Mecklenburg-Vorpommern, where the unemployment rate has dropped from 25% to 10% in recent years, had taught her how important it was to have experienced advisers on hand helping young people on a local level. "The [young people] need both to be given hope and to be pushed into investing their own energies … that can't be done centrally by Madrid or Berlin."

So has she now, on a far grander scale than she might ever have imagined, finally fulfilled her wish by becoming Europe's jobs tsar?

"No," she answered, appearing faintly annoyed by the question. "My task is to set the right political course in Germany and alongside my colleagues in Europe."

With dire problems after a lending binge, Ireland is in the centre of the eurozone austerity debate, but has it taken the right route?

Mohamed el-Erian guardian.co.uk, Tuesday 2 July 2013 17.24 BST

Both sides of the austerity debate that is now gripping economists and policymakers cite Ireland's experience as evidence for their case. And, however much they try to position the country as a poster-child, neither side is able to convince the other. Yet this tug-of-war is important, because it illustrates the complex range of arguments that are in play. It also demonstrates why more conclusive economic policy making is proving so elusive.

Here is a quick reminder of Ireland's sad recent economic history. Lulled into complacency and excess by ample supplies of artificially cheap financing, Irish banks went on a lending binge. Irresponsible risk-taking and excessive greed outpaced prudential regulation and supervision. The banking system ended up fueling massive speculation, including a huge runup in real-estate prices, only to be brought to its knees when the bubbles popped.

Unlike the many Irish households that lost jobs and part of their wealth, the banks were deemed to be "too big to fail", so Ireland's political elites intervened with state funding. But, by underestimating both the domestic and international aspects of the problem, the authorities transformed a banking problem into a national tragedy.

Rather than restoring the banks to financial health and ensuring responsible behaviour, the Irish economy as a whole was dragged down. Growth collapsed; unemployment spiked. Lacking opportunities, emigration increased – a vivid reminder of how economic crises have wreaked havoc on the country's demographics throughout its history.

Investors withdrew in droves from what was once deemed the "Celtic Tiger". The government had no choice but to request a bailout from the troika – the International Monetary Fund, the European Central Bank, and the European Commission – thereby transferring an important component of national economic governance to an ad hoc, fragile, and sometimes feuding group of institutions.

While other struggling eurozone members also turned to the troika, Ireland stands out in at least two notable ways. First, two democratically elected governments have steadfastly implemented the agreed austerity programmes with little need for waivers and modifications – and thus without the associated political drama. Second, despite enduring considerable pain, Irish society has stuck with the programme, staging few of the street protests that have been common in other austerity-hit countries.

All of this puts Ireland in the middle of three important issues raised in the austerity debates: whether orthodox policy, with its heavy emphasis on immediate budget cuts, can restore conditions for growth, employment gains, and financial stability; whether the benefits of eurozone membership still outweigh the costs for countries that must restructure their economies; and how a small, open economy should strategically position itself in today's world.

Austerity's supporters point to the fact that Ireland is on the verge of "graduating" from the troika's programme. Growth has resumed, financial-risk premia have fallen sharply, foreign investment is picking up, and exports are booming. All of this, they argue, provides the basis for sustainable growth and declining unemployment. Ireland, they conclude, was right to stay in the eurozone, especially because small, open economies that are unanchored can be easily buffeted by a fluid global economy.

"Not so fast," says the other side. The critics of austerity point to the fact that Irish GDP has still not returned to its 2007 level. Unemployment remains far too high, with alarming levels of long-term and youth joblessness. Public debt remains too high as well, and, making matters worse, much more of it is now owed to official rather than private creditors (which would complicate debt restructuring should it become necessary).

The critics reject the argument that small, open economies are necessarily better off in a monetary union, pointing to how well Switzerland is coping. And they lament that eurozone membership means that Ireland's "internal devaluations," which involve significant cuts in real wages, have not yet run their course.

The data on the "Irish experiment" – including the lack of solid counterfactuals – are not conclusive enough for one side to declare a decisive victory. Yet there is some good analytical news. Ireland provides insights that are helpful in understanding how sociopolitical systems, including economically devastated countries such as Cyprus and Greece, have coped so far with shocks that were essentially unthinkable just a few years ago.

On my current visit, most of the Irish citizens with whom I have spoken say that the country had no alternative but to follow the path of austerity. While they appreciate the urgent need for growth and jobs, they believe that this can be achieved only after Ireland's finances are put back on a sound footing. They also argue that, given the banks' irresponsibility, there is no quick way to promote sustained expansion. They are still angry at bankers, but have yet to gain proper retribution.

Ireland's accumulation of wealth during its Celtic Tiger period, when the country surged toward the top of Europe's economic league table, has also been an effective shock absorber. This, together with fears about being left out in the geopolitical cold (despite the country's historical links with Britain and America), dampens Irish enthusiasm for economic experiments outside the eurozone.

Indeed, Irish society seems remarkably hesitant to change course. Right or wrong, Ireland will stick with austerity. Efforts to regain national control of the country's destiny, the Irish seem to believe, must take time. In some of Europe's other struggling countries, however, citizens may well prove less patient.

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Despite opposition, Ireland passes bill to expand abortion access

By ReutersTuesday, July 2, 2013 15:33 EDT

By Padraic Halpin

DUBLIN (Reuters) – Four lawmakers from Irish Prime Minister Enda Kenny’s party came out on Tuesday against a move to legalize abortion under certain conditions but are unlikely to be able to scuttle the measure or threaten his comfortable majority.

Kenny’s government is proposing access to abortion when a woman’s life is in danger and both sides of the debate have staged protests on an issue that has long polarized the overwhelmingly Roman Catholic country.

A two-decade debate over how Ireland should deal with a Supreme Court ruling that abortion be permitted when a woman’s life is in danger was reopened last year after the death of a woman who was denied an abortion of her dying fetus.

Successive governments had sidestepped acting on the ruling, the result of a challenge by a 14-year-old rape victim in the so-called “X-case” of 1992 to a constitutional amendment nine years earlier that intended to ban abortion in all instances.

Midway through his five-year term, Kenny had kept all but one of Fine Gael’s 76 members of parliament on side, even as the coalition government pushed through tough austerity measures required under an EU/IMF bailout.

The government has the largest majority on record and support from most of the opposition, meaning 138 of the lower house’s 165 members supported the abortion bill. It will become law after a final vote is held, probably before the end of July.

But at least five other members of Kenny’s center-right Fine Gael, including European Affairs Minister Lucinda Creighton, have said they hope to convince fellow lawmakers to amend the bill before then, raising the prospect of more defections.

Kenny, who has said he has been sent letters written in blood by opponents of his plans, has ruled out making any substantive changes including removing the threat of suicide as a reason for termination, a contentious issue for his party.

He insisted the government voted as one on the bill, meaning Tuesday’s four backbench rebels face expulsion from the party.

If the government changes its attitude to the protests, Turkey could become an exemplar state in the Muslim world

Elif Shafak guardian.co.uk, Wednesday 3 July 2013 11.54 BST

The contrasts that define modern Turkey were never more apparent than last weekend, when thousands of people gathered in Istanbul to support equal rights for gays, transsexuals and bisexuals. The protesters marched along Istiklal Avenue waving banners and rainbow flags, creating a scene that felt unique in today's Muslim world. The placards, written in Turkish, Kurdish, Armenian, Arabic and English, were imbued with mettle and humour. "Homosexuality is not a disease. But racism is," said one of them. "So what if I am a fag?" asked a banner. Another read: "We are the soldiers of Freddie Mercury."

If the Gay Pride parade, now in its 11th year, has been more crowded and flamboyant than ever, this is at least partly due to the so-called "Gezi spirit". After nationwide protests left more than 4,000 wounded and four people dead, the streets and squares have become an open space for politics. Citizens' meetings are organised in various areas, discussions are held about new forms of civic disobedience and there is a flurry of activity on social media.

What is particularly interesting about this new development is that it blurs religious and ideological boundaries. Suddenly gay rights activists are backing Kurdish rights activists; Kemalists are marching side by side with pro-EU liberals. People from different social, cultural and ethnic backgrounds are finding themselves chanting the same slogans, raising similar concerns. In a country where people have been divided into cultural ghettoes for too long, this is unprecedented.

Signs of this were first detected inside Gezi Park. During the weeks of protest, the camp hosted a wide range of activists, from leftists to mystics, from women in headscarves to socialist feminists. United in their criticism of the government, subjected to the same tear gas and pressurised water, they built up a new camaraderie. The AK party's minister of education, Nabi Avcı, acknowledged this situation when he said that the government had done what the opposition parties had not been able to achieve in many years – to unite people from all walks of life.

New exchanges are taking place among the cultural elite as well. Recently 81 artists and writers signed a common petition called "We are concerned". Among us were people with very different views. What brought us together was a collective concern about the continuing polarisation and a criticism of the government's attitude towards artists – pointing the finger at individuals and accusing them of being behind the protests.

In another campaign, hundreds of female academics, writers and journalists, many of them liberals, leftists and secularists, have signed a petition to stop discrimination in the public space against headscarved women. In Turkey a woman who wears a headscarf cannot become a lawyer or a teacher, or perform public service. The petitioners are asking for equality for all women, regardless of dress codes.

Meanwhile, the Kurds are expecting the government not to slow down the peace process and to carry out reforms. The pro-Kurdish BDP has called for marches in major cities. The reaction was triggered by an incident in the district of Lice, which left one man dead and several others wounded after security forces fired on protesters.

Young and dynamic, Turkey's civil society is anything but silent. A new form of engaged citizenship is developing, which may, in the long run, strengthen the country's pluralistic democracy. However, Turkey remains a polarised society. AK party officials, instead of trying to bridge the gap, have been fanning the flames with incendiary rhetoric. So far they have accused American lobbies, Jewish lobbies, Israel, BBC, CNN and some artists and young protesters.

This is a crossroads for the country. If the government realises that it represents those who have not voted for it just as much as those who have; and celebrate diversity through more democracy, freedom of speech and human rights, Turkey could become an exemplar state throughout the Muslim world. If the government takes the other path, however, and uses today's tensions as convenient propaganda material for the forthcoming elections, not only will Turkish democracy be badly bruised, but the entire region will also be affected.

Supporters must use maximum force to ensure Sochi Games do not take place, rebel leader says in video

Miriam Elder in Moscowguardian.co.uk, Wednesday 3 July 2013 10.49 BST

The leader of Russia's Islamist movement has lifted a moratorium on attacks inside Russia and called on his rebels to disrupt the upcoming Winter Olympics in the southern city of Sochi.

In a video dated June 2013, Doku Umarov said his followers must use "maximum force" to ensure the Games do not take place.

After claiming responsibility for deadly attacks on the Moscow metro and Moscow's Domodedovo airport, Umarov last year declared a ceasefire inside Russia as protests against the Kremlin leadership gripped the capital. In the video he said Vladimir Putin, the president, had mistaken the move for weakness.

"Today we must show those who live in the Kremlin … that our kindness is not weakness," Umarov said, speaking in a forest and dressed in green camouflage. "They plan to hold the Olympics on the bones of our ancestors, on the bones of many, many dead Muslims buried on our land by the Black Sea. We as mujahideen are required not to allow that, using any methods that Allah allows us."

Russia's Islamist rebels consider Sochi to be part of an unformed Caucasus emirate stretching along Russia's southern flank.

Security concerns over the Olympics, to be held in February 2014, are running very high, with Sochi just 250 miles from the republics of Chechnya and Dagestan, where most of Russia's rebels live.

During a visit by Putin and David Cameron to Sochi in May, the two leaders said Russia and Britain's security services would co-operate on security before the Games.

Russia has also reached out to the US and Georgia, two countries with which it has poor relations, to co-operate on security, moves that reflect both Russian and global concern over potential violence at the event.

Umarov called on his followers to use "maximum force … to disrupt these satanic games to be held on the bones of our ancestors".

Umarov, the leader of an umbrella organisation comprising branches of regional rebel groups throughout Russia, relies on video messages to get his messages out, both to leaders in the Kremlin and to his followers around the country. He is believed to be hiding in the mountains between Chechnya and Dagestan.

He has claimed responsibility for a number of spectacular attacks on Russian soil, including suicide bombings on the Moscow metro in 2010, which killed 40 people, and at Domodedovo airport in 2011, which killed 37.

Egypt's president, Mohamed Morsi, vowed to protect his presidency with his life on Tuesday night, hours before an ultimatum from the leader of Egypt's armed forces is due to expire.

In a defiant late-night speech, Morsi raised the stakes in the standoff between the Muslim Brotherhood and the Egyptian military – the two most powerful groups in the land – as supporters and opponents of the president clashed in deadly gun fights across the country.

It leaves Egypt braced for its most decisive day since the revolution, with its military preparing to suspend the country's constitution and potentially cripple the authority of its first democratically elected leader.

The Supreme Council of the Armed Forces (Scaf) made clear that it would stick to an ultimatum it gave Morsi on Monday that urged the embattled president to respond to a wave of mass protests within 48 hours or face an intervention which would in effect subsume his government. Scaf has given no indication it will waive its ultimatum, which expires at 5pm on Wednesday.

But Morsi's midnight speech made it clear he felt he derived his authority from electoral legitimacy that could not be overridden. Warning against both domestic and international intervention, he claimed that any attempt to force him from power would spark violent conflict between Islamists and their opponents.

"If the price for legitimacy is my blood, then I am prepared to sacrifice my blood to legitimacy and my homeland," Morsi said in a speech that seemed aimed more at rallying his supporters than addressing his opponents, and which mentioned legitimacy more than 30 times.

Earlier in the evening, the military command again claimed that its widely anticipated actions would not amount to a military coup.

However, according to details of a roadmap for ending the crisis obtained by Reuters, the military commander Abdul Fatah al-Sisi would play a central role in the country's affairs, installing an interim council of civilians and delaying parliamentary elections until a new constitution was drafted. A senior military source said that scenario was the most likely among those being discussed.

Morsi, a leading figure in the Muslim Brotherhood movement, took office after elections in June last year. His tenure as leader – the first to replace the ousted dictator Hosni Mubarak – has been plagued by claims that governance under him has been strongly tilted towards his Islamist power base at the expense of other key stakeholders in Egyptian society.

Egypt's moribund economy has also taken centre stage since the weekend, which marked the first anniversary of Morsi taking office, with his government being blamed for chronic fuel shortages and high food prices.

Supporters of Morsi have denied claims that the government is unrepresentative and said Egypt would not be "driven backwards" by the military's threat to intervene.

At rallies held by pro-Morsi supporters in parts of Cairo, including Nasr City, and in the north of the country Muslim Brotherhood leaders vowed an all-out battle to defend the status quo. There were reports that some men carried burial shrouds at the Nasr City rally to demonstrate the extent of their defiance.

"Any coup of any sort will only pass over our dead bodies," the senior Brotherhood official Mohamed el-Beltagy said in a speech at a rally on Monday night, calling for "families in all Egyptian governorates and villages to be prepared to take to the streets and fill squares" to support the president.

However, the rallies were dwarfed in size and fervour by a demonstration at the focal point of Egypt's revolution, Tahrir Square, which demanded that Morsi quit or form a power-sharing government that would sharply diminish the influence of his support base.

Those calling for the end of his presidency include an uneasy alliance of disaffected backers, as well as supporters of the former regime – many of whom were on opposite sides of a violent divide in the heady months after Mubarak fell.

The breadth of opposition to Morsi appears to give him and the Muslim Brotherhood few options in the coming days and sets the scene for either an ignominious defeat or a new phase of violent uncertainty.

Even the interior ministry, a staunch supporter of the Mubarak regime, appears to have abandoned him. Morsi has repeatedly offered to speak with his opponents, but has been rebuffed at every turn by groups who increasingly feel they have little to gain by accepting a dialogue as his problems pile up.

Several more key aides and cabinet ministers quit the Morsi government on Tuesday as the president met Sisi in the presidential palace. With the two men locked in a long discussion, military helicopters again circled Tahrir Square. The army released video footage taken from the helicopters that showed festive scenes below, in an act that clearly demonstrated the armed forces remained behind the protesters.

By nightfall, hours before Sisi's expected announcement, Tahrir Square was once more overwhelmed by demonstrators, who had spilled across a bridge over the Nile. There were reports of sporadic armed clashes in Cairo early in the evening, with gunfire heard in Giza. However, the centres of both camps remained largely peaceful.

Long regarded as a trusted and integral part of Egyptian life, the military has never been far from events during the past two and a half years. It distanced itself from Mubarak as his authority crumbled, then was accused of overplaying its hand during the transitional phase that led to last year's elections. Over the last few days, however, it has been widely embraced by an eclectic array of Morsi opponents.

"I voted for Morsi, but I changed my mind because he didn't live up to what he promised," said Ahmed Mahmoud, 25, in Tahrir Square. "If it wasn't for the recent army statement, we'd all be in a state of war."

Shaima Salah, 28, said the military's role in any post-Morsi period should be short and limited. "The only solution is for the army to lead a very short transitional period, until new presidential elections," she said. "But I'm worried about the army taking over the state, and Egypt going back to a military kind of government."

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Egypt’s army ‘ready to die’ to protect against ‘any terrorist, radical or fool’

By ReutersTuesday, July 2, 2013 22:00 EDT

CAIRO (Reuters) – Egypt’s high command said on Wednesday the army was ready to die to defend Egypt’s people against terrorists and fools, in a response to Islamist President Mohamed Mursi that was headlined “The Final Hours”.

The post on the official Facebook page of the Supreme Council of the Armed Forces (SCAF), headed by armed forces chief General Abdel Fattah al-Sisi, said: “We swear to God that we will sacrifice even our blood for Egypt and its people, to defend them against any terrorist, radical or fool.”

Issued three hours after Mursi appeared on television to reject an ultimatum from Sisi that he share power with his opponents or face a military solution by 10:00 a.m. EDT (1500 GMT), a military source said the statement made clear that the armed forces would not abandon their demands.

(Reporting by Yasmine Saleh; Editing by Alastair Macdonald)

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Mohamed Morsi loyalists ready to fight to preserve Islamist rule

For many Islamists, the removal of Morsi from power would be a coup not just against him but against Islam as they perceive it

Posters of Mohamed Morsi can be seen on every other Egyptian street this week, usually with the eyes gouged out and his face covered with a giant cross. But outside the Rabaa al-Adaweya mosque in Nasr City, in east Cairo, pictures of the president remain in rather better shape.

It is here that about 100,000 Morsi supporters have gathered in recent days, a reminder that however many millions have called for his downfall since Sunday he retains a significant core support.

"I'm here to defend my vote and to defend a revolution I was part of," says Shaima Abdel-Hamid, a teacher at the rally. "We chose a president and now they want to get rid of him when he's dealing with 30 years of corruption. And they want to get rid of him after only a year."

For many their backing of Morsi goes beyond support for his democratic legitimacy. The battle for Morsi is also a battle for the concept of political Islam, or the idea that the state should be run according to Islamist principles.

"Myself, I hate Morsi," says Badr Badradin, an advertising agent who feels Morsi hasn't done enough to promote Islamist rule. "But it's not just about Morsi. It's about the future of political Islam. He just happens to be its face right now." Outside the mosque this week Islamists have often pointedly chanted: "Seculars will not rule Egypt again."

In recent days support for Morsi has been confined mainly to the Rabaa al-Adaweya rally. But after the army's ultimatum on Monday and following days of attacks on Islamist offices, pro-Morsi supporters announced rallies in all of Egypt's 27 governorates and ramped up their rhetoric.

"Any coup of any sort will only pass over our dead bodies," said Mohamed el-Beltagy, a senior Brotherhood official, at the rally on Monday night. He called for "families in all Egyptian governorates and villages to be prepared to take to the streets and fill squares" to support their president.

Support for Morsi comes not just from the Brotherhood but from Salafis – ultra-orthodox Muslims who try to mimic the lifestyle they believe the prophet Muhammad once followed – and centrist Islamist parties. The Nour party, a leading Salafi group, is one exception, choosing to support neither Morsi nor his opponents.

In the eyes of many Morsi supporters the 2011 uprising was an Islamic one, and it is now being disrupted by saboteurs loyal to the ousted dictator Hosni Mubarak. "Now we're seeing the revolution being threatened," says Mohamed Sherif Abdeen, an IT teacher and member of Morsi's Muslim Brotherhood.

From time to time Abdeen and his colleagues line up in well-formed platoons – wearing an odd hotchpotch of builders' hardhats and motorbike helmets – ready, they say, to defend the presidential palace should it be breached by Morsi's opponents. Some carry sticks and homemade shields emblazoned with the slogan "Legitimacy is a red line", a reference to Morsi's democratic mandate.

"We won't do anything if the army and police do their job," says Abdeen. "But if not, and they don't protect the presidential palace, we will protect it with our chests."

There are fears that Egypt might fall into armed factional conflict. In Qena on Tuesday Islamist groups said they may resort to violence should Morsi be forced from power.

"Many Islamists – not just in the Brotherhood – would be out of control," said Khalil al-Anani, a specialist on Islamism at Durham University, who warned that the fall of Morsi would radicalise scores of young Islamists. "For them, this would be a coup not just against the president but against Islam as they perceive it – and this is one of the problems facing Morsi at the moment. He can't satisfy the opposition if he doesn't step down, nor his social base if he does."

For days, most Morsi supporters kept to a disciplined message of peaceful protest in their conversations with journalists, but some now seem to have snapped. "It's fine," says Mohamed Tariq, a 16-year-old student at a new pro-Morsi rally in west Cairo. "If he goes down, we'll bring down the president they elect. It's either an Islamist state, or we get martyred."

Khaled Fahmy, head of history at the American University in Cairo, played down the prospect of civil war. "There's a possibility of Islamists giving up on democracy," he argued. "But they already tried [violence] during the 1990s. It did not achieve their ends, and they realised this."

In the 1990s hardline Islamist groups such as Gamaa Islamiya carried out a series of terrorist acts across Egypt; they renounced violence more than a decade ago.

Older Islamists at a rally in west Cairo say memories of the brutal state backlash against Islamists during and since the terror campaign make them more wary of a return to secular rule.

"Resorting to violence would be the last option when everything else does not work," says Sheikh Hamida Mohamed, a senior Gamaa Islamiya official who was imprisoned and tortured for nine years under Mubarak. "If we were violent people, we would have already gone after the officers, who we know by name, who burnt our houses and took our wives and daughters. If there was a secular president who allowed religion to prosper, there wouldn't be any need for a return to arms."

But he adds: "The expected thing from the seculars if they reach power is that they will oppress and imprison us. I'd rather die than live in the humiliation of prison. We've been in prison for years and the scenes of humiliation inside are beyond what any human should experience. Islamists will not allow the age of killing and torture to come back."

**********

SPIEGEL ONLINE07/02/2013 03:26 PM

World from Berlin: Morsi Reminiscent of Mubarak in Egypt

Even in the face of nationwide protests and an ultimatum from the military, Egyptian President Mohammed Morsi has refused to step down. But anger with his government is not likely to subside. German commentators worry that violence will only increase.

One day after the head of Egypt's armed forces issued President Mohammed Morsi a 48-hour ultimatum, the country is in a state of turmoil.

General Abdel Fattah al-Sisi said on Monday that the military would step in "if the demands of the people are not met." Five of Morsi's ministers resigned the same day, saying they wanted to show "solidarity" with the protesters. A sixth, Foreign Minister Mohamed Kamel Amr, followed suit on Tuesday. Yet Morsi, the country's first democratically elected president, has remained defiant, releasing a statement on Tuesday that he would not step down.

On June 30, the first anniversary of Morsi's election, hundreds of thousands of Egyptians took to the streets to call for his resignation. On July 1, a group of men stormed the Cairo headquarters of Morsi's Muslim Brotherhood party, setting small fires and looting the offices.

During the president's disastrous first year in office, Islamist radicals have increased their influence, violent unrest has spread throughout the country and the economy has taken a plunge.

Though the army says it has no intention of involving itself in government or politics, Morsi's allies in his Muslim Brotherhood party have been holding their own rallies to show support for the embattled president and have vowed to take to the streets to stop what they say is a "military coup."

What, though, can be done to calm the escalating violence? German editorialists take a closer look at the situation on Tuesday.

Center-left daily Süddeutsche Zeitung writes:

"Nobody knows who is going to govern Egypt in the end. Morsi? A transition leader? The army? The attack on the pompous party headquarters of the Muslim Brotherhood … and the first deaths as a result indicate that the violence is likely to increase. And there are some certainties: The Muslim Brothers, who appeared invincible just one year ago, have failed spectacularly ... The Muslim Brotherhood, the mother-organization of all Islamist groups, has become a weight on the shoulders of Islamists in the entire region. The demonstrative piety displayed by the brotherhood has not been able to cover up their political errors."

"If the Muslim Brotherhood were smart, they would now retreat, read a few handbooks on political inclusion, and try again in a couple of years. A share of the Egyptian electorate prefers religious parties and that preference must be served so that they don't fall into the hands of radicals. If the opposition is smart, it will allow the Muslim Brotherhood the opportunity to represent the pious. Mostly, though, the opposition shouldn't see the millions of anti-Morsi protesters as election helpers for the likes of ElBaradei, Mussa and Sabahi. It would be a good idea if Egypt's politicians would cease viewing their country as a trophy."

Business daily Handelsblatt writes:

"Among all of the serious mistakes committed by Egyptian President Morsi, the worst is his undemocratic interpretation of the mandate granted him by the electorate. The belief that an election victory gives the majority the right to impose its will on the minority produces that which can now be seen on the streets of Cairo: a confrontation that threatens the very foundation of the state."

"Those who are in power believe they have the freedom to do what they want. And this makes the opposition believe that it only has one chance to guarantee its survival. The conflict thus becomes an existential battle in which neither side can surrender without a loss of face. That is why the orgy of violence in Cairo is much more than just an eruption of dissatisfaction. Both sides are convinced that everything is at stake."

"The only way out is for Morsi to resign and for new elections to be held. But that can only happen if democracy is understood as a system whereby power is only handed out for a limited period of time -- as a power that expires when trust has disappeared and not only when an election is lost."

Left-leaning daily Die Tageszeitung writes:

"Egyptian President Mohammed Morsi and Turkish Prime Minister Recep Tayyip Erdogan have one thing in common: They believe that democracy means merely that people are allowed to vote every four years. In between, they can rule as they like. They believe their democratic election grants them the freedom to do as they like, repress those who think differently and to use brutal violence."

"The huge demonstrations in recent days in Egypt have made absolutely clear to the new Egyptian government just how intense the anger is in the country. But one shouldn't expect the Morsi government to show understanding. His government has explained away the protests by speaking of conspiracy theories and influence from overseas. And he has called for his own followers to march as well. It is no wonder that many in Egypt are reminded of Morsi's predecessor, the autocrat Hosni Mubarak."

Center-right daily Frankfurter Allgemeine Zeitung writes:

"The Egyptian revolution has reached a new phase. Disappointment with Morsi and his government, but particularly with the country's economic erosion, has spread dramatically. Extraordinary circumstances helped the Muslim Brotherhood to their election victory; they were the only organized group following the fall of Mubarak. But just one year later, the shine is off. Morsi has been unable to stop the plummeting reputation of Islamist politics, but his resignation would merely create a vacuum. The Muslim Brothers would be wise not to respond in kind to the violent destruction of their headquarters. An escalation of the violence would require the army to calm the situation. They have already issued the ultimatum."

-- Charles Hawley and Charly Wilder

***********

Almost 100 women sexually assaulted during anti-Morsi protests

By Agence France-PresseWednesday, July 3, 2013 7:36 EDT

Close to 100 women have fallen victim to “rampant” sexual attacks in Cairo’s Tahrir Square during four days of protests against Egypt’s Islamist President Mohamed Morsi, Human Rights Watch said on Wednesday.

“Mobs sexually assaulted and in some cases raped at least 91 women in Tahrir Square… amid a climate of impunity,” HRW, which is based in New York, said in a statement.

It cited figures from the Egyptian Operation Anti-Sexual Harassment/Assault, which runs a hotline for victims of sexual assault, showing that there were 46 such attacks against women on Sunday, 17 on Monday and 23 on Tuesday.

Another women’s rights group, Nazra for Feminist Studies, reported that there were another five attacks on Friday, said HRW.

The watchdog called on Egyptian officials and political leaders “across the spectrum to condemn and take immediate steps to address the horrific levels of sexual violence” in the iconic square.

“The rampant sexual attacks during the Tahrir Square protests highlight the failure of the government and all political parties to face up to the violence that women in Egypt experience on a daily basis in public spaces,” said Joe Stork, HRW’s deputy Middle East director.

“These are serious crimes that are holding women back from participating fully in the public life of Egypt at a critical point in the country’s development.”

Several women required surgical intervention after the attacks, some were “beaten with metal chains, sticks, and chairs, and attacked with knives,” HRW said.

The government response has been to “downplay the extent of the problem or to seek to address it through legislative reform alone,” whereas what is needed is for attackers to be brought to justice, HRW said.

Some say the attacks are staged by thugs who are abusing a security vacuum and confident of escaping prosecution.

Others say the assaults are organised to scare women off from joining protests and to stain the image of the anti-government demonstrations.

The bitter feud in Nelson Mandela's family over the unauthorised removal of the remains of three of his children from the family graveyard was laid bare in open court on Tuesday while the anti-apartheid hero lay critically ill in hospital.

Lawyers for 16 members of Mandela's family – including his wife, Graca Machel, and his eldest daughter, Makaziwe – sought to enforce the immediate return of the bodies for reburial in Mandela's home village of Qunu, where he has said he wishes to be interred with his late family.

The remains were secretly exhumed in 2011 by his grandson Mandla Mandela and moved to the nearby village of Mvezo, where Mandela was born.

The case has gripped South Africa in the midst of its grief over Mandela's failing health. The family has traded recriminations with Mandla, an ANC MP, amid calls for him to be stripped of his status as a local tribal chief.

Journalists were admitted to the court hearing for the first time on Tuesday, after Friday's session was heard in private because of the deeply sensitive issues involved.

Mandla has been accused by other family members of removing the bodies "in the dead of night" to ensure the future burial of the former president in Mvezo, despite the expressed desire of Mandela to be buried in nearby Qunu where he grew up.

It has been suggested that Mandla hopes to transform Mvezo – where he has built a memorial and guesthouse – into a centre of pilgrimage as the last resting place of South Africa's first democratically elected president.

The case was called to the high court in Mthatha, in the Eastern Cape, after an initial court order issued on Friday ordering the return of the remains was found to have an error regarding the date by which Mandla was required to return the bodies.

According to media reports, the family's lawyers argued that the return of the bodies was required urgently over fears that Mandela's death was imminent.

Makaziwe and two of Mandela's grandchildren, Ndaba and Ndileka, listened as Mandla – who was not present in court – was accused of "reprehensible behaviour" over the affair.

Mandla's lawyer Phillip Zilwa accused the court of issuing the initial order without allowing his client to defend himself.

The judge Lusindiso Pakade provisionally ordered Mandla to return the remains by 3pm on Wednesday while he considered written arguments from both sides over whether or not to revoke the order.

It was claimed that criminal charges were being considered against Mandla over the exhumation.

DAR ES SALAAM, Tanzania — The Africa trip that President Obama could have taken would have looked very different.

He could have stopped in Kenya to deliver tough words to its president, who has been charged with crimes against humanity by the International Criminal Court, accused of orchestrating politically motivated death squads.

He could have gone to Nigeria to address both the Islamist militancy shaking the region and the human rights abuses committed by American partners in the effort to contain it. And he could have traveled to the Democratic Republic of Congo to demonstrate his commitment to ending the violence that has plagued it for so many years.

Instead, Mr. Obama chose an itinerary that was largely safe and heartwarming. His three-nation tour of sub-Saharan Africa, which ended Tuesday, avoided hot spots in favor of places where development is succeeding, investment is increasing and democracy is, in at least two of the cases, well established.

Aides traveling with the president said the trip, Mr. Obama’s first extended visit as president, had been designed to accentuate the positive on a continent too often dismissed as beyond help. The destinations were chosen, they said, to provide a forum for him to talk about a new model for helping Africa, one that emphasizes partnership and investment over aid and dependency.

“The entire purpose of the trip is to lift up our efforts on the affirmative opportunities in Africa — trade, investment, democratization and impactful development programs,” said Benjamin J. Rhodes, a deputy national security adviser and one of Mr. Obama’s top foreign-policy advisers.

A focus on terrorism and ethnic violence would have done little more, he said, than “reinforce negative stereotypes of a continent in permanent crisis.”

Some of Mr. Obama’s optimism on the trip was overshadowed by anxiety over the health of Nelson Mandela, the 94-year-old former South African leader, who remained in critical condition in a Pretoria hospital. Mr. Obama spent much of his time in Africa expressing his concern about Mr. Mandela and competing for the news media’s attention.

Nevertheless, Mr. Obama repeatedly delivered a hopeful message. In Senegal, he spoke excitedly about new technologies that enable farmers to quadruple their yields. In Tanzania, he announced programs to provide reliable electricity to those still in the dark and prevent poachers from trafficking in wildlife. And in Cape Town, he told students that they represented the future of a continent on the move.

“From microfinance projects in Kampala to stock traders in Lagos to cellphone entrepreneurs in Nairobi, there is an energy here that can’t be denied — Africa rising,” Mr. Obama said.

Mr. Obama and his advisers say what Africa needs now are not more lectures from an American president or declarations about the dangers of war and other violence. What Africans need, they say, is a president willing to put the weight of his office behind the less attention-grabbing programs that will help secure the food supply, improve education, clear the way for trade and promote efficient government.

That contention has fueled a debate about what Africa needs more: a president who directly confronts the challenges of a continent, warts and all, or one who sidesteps the negative on his visit to try to inspire a better future.

Critics of Mr. Obama, particularly in Africa, say he missed opportunities to use his influence as America’s first African-American president to shine light on the misdeeds of nations and leaders who are holding back progress. They say Mr. Obama passed up a chance to deliver a speech in Kenya, his father’s homeland, that could have underlined America’s disappointment in the actions of Uhuru Kenyatta, its president, and other African strongmen.

Instead of traveling to South Africa, where Mr. Obama and his family took the expected tour of Mr. Mandela’s jail cell on Robben Island, critics say, he could have gone to Malawi or Liberia, two nations with female presidents, to highlight the successes and challenges of women on the continent.

Critics also point to Nigeria, the most populous nation in sub-Saharan Africa, as an obvious choice for a president interested in shaping the continent’s future.

“It seems to me a real oversight not to visit Nigeria,” said Mwangi S. Kimenyi, a Kenyan scholar at the Brookings Institution. “I would have thought that whoever helped plan for the trip or for the president, in a strategic way, would have included Nigeria. It’s a very important country, and it’s likely going to overtake some other economies in Africa.”

Mr. Obama’s advisers pointed out last week that security concerns in some of these places made travel there exceedingly difficult. And they insist that the president did not altogether avoid the challenges that Africa faces. In the Cape Town speech, he noted that “from Congo to Sudan, conflicts fester — robbing men, women and children of the lives that they deserve.”

More broadly, Mr. Obama’s advisers argue that his critics have an outdated view of how America can best provide leadership.

Mr. Rhodes recalled the speech that Mr. Obama gave last month at Berlin’s Brandenburg Gate, where a wall once stood as a concrete symbol of oppression. In part, the wall came down because of high-minded speeches, Mr. Rhodes said. But now, he argued, the challenge is different.

The president repeatedly described opportunities for economic partnership as a victory for both Africa and America.

As he finished his trip, Mr. Obama visited a once-idle power plant in Dar es Salaam that a partnership between American business and the Tanzanian government had brought back to life. Mr. Obama’s administration has agreed to spend $7 billion — and recruited $9 billion from businesses — in an effort to double access to electricity in Africa.

In a more whimsical display of solutions, Mr. Obama tried out a soccer ball that stores kinetic activity in a battery during use and later provides electricity to power a lamp or charge a cellphone.

“I don’t want to get too technical, but I thought it was pretty cool,” he said, at one point bouncing the ball on his head. “You can imagine this in villages all across the continent.”

************

July 2, 2013

After Obama’s Visit, an Electric Moment for Tanzania Lingers

By NICHOLAS KULISHIHT

DAR ES SALAAM, Tanzania — The curving stretch of road along the Indian Ocean behind the State House was once simply called Ocean Road. Now, a black-and-white-striped post holds a sign bearing its new name: Barack Obama Drive.

After Mr. Obama headed back to the United States on Tuesday — ending a trip to sub-Saharan Africa that also took him to Senegal and South Africa — the American flag still waved alongside the green, yellow, black and blue of the Tanzanian flag, under the ubiquitous signs with Mr. Obama’s face and the Swahili word for welcome, “karibu.”

Mr. Obama retains the kind of celebrity status here in East Africa that he once enjoyed in Europe and other parts of the world, making his visit a public event as much as an act of diplomacy. The cheering throngs welcoming him to Tanzania were much larger and louder than those he saw on the first two stops of his trip.

“Obama is like the president of the world,” said Nuhu Sandari Mohamed, 60, who was out for a stroll along the street named after the president. “The fact that he’s connected to Africa, my children and their children and their children should know.”

Couples strolled and sat by the water on Barack Obama Drive on Tuesday, as ice cream salesmen pedaled their three-wheel cycles with coolers loaded with treats. For Said Maumba, 28, Mr. Obama’s visit was the best day he had ever had selling frozen treats, like Kreemas for about 31 cents, to the throngs waiting to watch Mr. Obama’s motorcade pass.

“He’s hugely famous, and a lot of people are obsessed and just want to see a glimpse of him,” Mr. Maumba said.

Mustafah Lada, 21, who was selling a knockoff iPhone along Barack Obama Drive, was a bit more skeptical. Unlike for ice cream sales, Mr. Lada said the distraction of Mr. Obama’s visit made it harder to sell cellular phones. More broadly, he questioned whether it was ordinary people or the elites who gained the most from American engagement.

“I believe it’s good that he came here, but the benefits?” Mr. Lada said. “I think it’s those people in power who are benefiting, and we people without regular employment are losing.”

Electricity remained a paramount concern of people here, for whom it is both a quality of life and a development issue. Before leaving on Tuesday, Mr. Obama toured a once-idle power plant that was brought back to life through a partnership between American business and the Tanzanian government. Mr. Obama’s administration has agreed to spend $7 billion — and has recruited from businesses an additional $9 billion — in an effort to double access to electricity in Africa.

Evarest Makwaya, 31, a gardener, said he was grateful that Mr. Obama had promised to help bring electricity to Tanzania. “I’m touched by the fact that he launched the power plant,” Mr. Makwaya said. “That’s one of the issues affecting ordinary Tanzanians.”

He said that although there was power where he lived in Dar es Salaam, the village where he came from did not have electricity. “I cannot say I’m happy, because my siblings and my parents live in darkness,” he said.

While Mr. Obama has frequently been criticized for prioritizing other parts of the world over Africa — and for barely visiting sub-Saharan Africa as president before the trip that ended Tuesday — others said such complaints were misguided.

“We don’t expect much material gain,” said Margaret Sigale, who had just been at a hospital with her mother. “In my opinion, President Obama has no obligation to return to Africa simply because he is in a way connected,” she added, referring to his Kenyan father. “We should not make him feel he has to give anything, or has any obligation.”

“For the continent of Africa,” continued Ms. Sigale, 29, a homemaker with two daughters, 13 and 3, “President Obama will go down in history as the first black man in the White House.” Her older daughter was “very well aware” of Mr. Obama’s visit, and “was glued on TV watching.”

BANDAR SERI BEGAWAN, Brunei — Secretary of State John Kerry said on Tuesday that the United States and Russia were still working toward holding an international peace conference on Syria and agreed that it should take place “sooner rather than later.”

“We agreed that we are both serious, more than serious, committed,” Mr. Kerry said after meeting here in the Brunei capital with his Russian counterpart, Foreign Minister Sergey V. Lavrov.

But Mr. Kerry indicated that there were still differences with the Kremlin over the conference and suggested that it might not be held before September because of the press of other diplomatic business and the practice of European and other leaders to go on vacation in August.

Mr. Kerry made his remarks in a statement at the American Embassy here, and he did not take any questions.

In his meeting with Mr. Lavrov, Mr. Kerry also reiterated the Obama administration’s request that Edward J. Snowden, the former security contractor who has fled to Moscow, be returned to the United States. But Mr. Kerry said Mr. Snowden’s fate was not part of Mr. Lavrov’s “portfolio.”

The two diplomats met on the margins of a conference that was hosted by Southeast Asian nations.

Mr. Kerry first sought the Kremlin’s backing for the Syrian peace conference, to be held in Geneva, during a May trip to Moscow. At that time, Mr. Kerry indicated that the gathering, which would bring together the Syrian opposition with representatives of the government of President Bashar al-Assad, might take place by the end of May.

But the push for the peace conference was almost immediately overtaken by events as the Assad government, drawing on arms supplied by Iran and fighters from Hezbollah, the militant Lebanese group, made gains on the battlefield.

A weakened Syrian opposition faced the prospect of attending a conference to negotiate with representatives of a reinvigorated Assad government. Gen. Salim Idris, the senior rebel commander, said in early June that the opposition would not attend unless additional arms were sent to the rebels.

Since then, President Obama decided to covertly supply light arms, ammunition and possibly antitank weapons to the Syrian opposition, an administration official said last month.

Still, questions remain whether the steps taken by the United States and its partners are sufficient to tilt the military balance in Syria and whether the conference can achieve its main goal of fostering a political transition to a post-Assad government if Mr. Assad still believes he can prevail.

In recent months, Mr. Kerry has repeatedly stressed that it is vital to take steps to change the “calculation” of Mr. Assad that he can hold onto power so that a political settlement may be worked out. But on Tuesday, Mr. Kerry argued instead that military developments were not so important.

“Whether the regime is doing better or the opposition is doing better is frankly not determinative of that outcome because the outcome requires a transition government,” he said, referring to efforts to negotiate a political settlement.

Virtually since plans for the Geneva conference were announced in May, the United States and Russia have had differences over its purpose and structure.

During their initial discussions about organizing the meeting, the Russians argued that Iran, a staunch backer of the Assad government, be included.

The United States was opposed to including Iran, proposing instead that it include the “London 11,” a coalition of Western and Arab nations that has been supporting the Syrian opposition.

The Russians also suggested that multiple delegations from the Syrian opposition attend. Fearing that that would dilute the opposition’s influence, the United States has insisted that a unified Syrian opposition delegation attend.

A more fundamental point of contention has been the United States’ insistence that Mr. Assad cannot be part of the political solution. The Russians have not only supported Mr. Assad politically but have been also providing weapons to the Syrian government.

In his comments on Tuesday, Mr. Kerry said the two sides had “narrowed down some of the options with respect to the potential of that conference.” But he provided no details on what matters were now agreed upon and what differences remained.

Mr. Lavrov, for his part, asserted that one problem was disarray among the Syrian opposition and the demand of some of its members that Mr. Assad’s departure be a precondition for talks.

“Our American partners recognize that the main thing is to secure the consolidation of the Syrian opposition,” Mr. Lavrov told Russian journalists, according to the Russian news agency Interfax.

Mr. Kerry did not say when a Syria peace conference might take place. He said the next several weeks were a problem because he and Defense Secretary Chuck Hagel had to attend a meeting with their Russian counterparts in Washington in August. Another factor, he added, is the vacation patterns of European leaders.

“Obviously August is very difficult for Europeans and others, so it may be somewhat thereafter,” he said.

Ecuador finds microphone hidden in London embassy where Assange is living

By ReutersWednesday, July 3, 2013 8:51 EDT

By Estelle Shirbon

LONDON (Reuters) – Ecuador has found a hidden microphone inside its London embassy, where WikiLeaks founder Julian Assange is living, and will disclose on Wednesday who controls the device, its foreign minister said.

Ricardo Patino said the microphone was found inside the office of the Ecuadorean ambassador to the United Kingdom, Ana Alban, at the time of a visit to the embassy by Patino to meet with Assange on June 16. Assange lives and works in a different room within the embassy.

The Foreign Office in London declined to comment immediately on the allegation and Prime Minister David Cameron’s spokesman said he did not comment on security issues.

Assange has been living inside the embassy for more than a year to avoid extradition to Sweden to face allegations by two women of sexual assault and rape, which he denies.

He fears that if sent to Sweden he could be extradited from there to the United States to face potential charges over the release of thousands of confidential U.S. documents on WikiLeaks.

“IMPERIAL ARROGANCE”

“We regret to inform you that in our embassy in London we have found a hidden microphone,” Patino told a news conference in Quito on Tuesday. Footage of his appearance is available on the website of the Ecuadorean foreign ministry.

“I didn’t denounce this at the time because we didn’t want the theme of our visit to London to be confused with this matter,” said Patino, who met during his time in London with British Foreign Secretary William Hague to discuss Assange.

“Furthermore, we first wanted to ascertain with precision what could be the origin of this interception device in the office of our ambassador,” he said.

“We are sorry to say so, but this is another instance of a loss of ethics at the international level in relations between governments,” he added.

Ecuador’s protection of Assange has strained relations with Britain. The Foreign Office said after the meeting between Hague and Patino on June 17 that no substantive progress had been made to break the legal and diplomatic deadlock.

WikiLeaks used its Twitter account to condemn the hidden microphone.

“Sieging/bugging of Ecuador’s London embassy and the blockading of Morales jet shows that imperial arrogance is the gift that keeps on giving,” the anti-secrecy group said.

Brazil’s Congress has received a request from President Dilma Rousseff to hold a referendum on political reform in response to the worst social unrest in 20 years.

The move, widely supported by the public, came after three weeks of protests over corruption and public spending which marred the Confederations Cup, a dress rehearsal for next year’s football World Cup, which will also be held in Brazil.

The nightly rage that made headlines around the world has waned somewhat, but no one rules it flaring up again like it did after the Cup, when a million people took to the streets.

On Tuesday night truck drivers blocked roads in at least 10 states to press for the elimination of tolls and fuel subsidies.

The proposal for a plebiscite was delivered to senate and congressional president Renan Calheiros by Justice Minister Jose Eduardo Cardozo and vice president, Michel Temer, state news service Senado said.

“Calheiros announced he would act so that any changes resulting from the referendum take effect from (October) 2014,” a year before presidential elections are to be held, Senado said.

Cardozo said the referendum will include the reform of election campaign financing, the congressional voting system, rules governing coalitions and legislation on secret ballots.

“The executive is merely making a simple suggestion,” Temer told reporters. “It is congress which will oversee (the process) from the start through to the conclusion.”

The protests began in Sao Paulo and Rio de Janeiro over hikes in public transport fares but mushroomed into demands for improvements in crumbling public services and for an end to rampant corruption.

Some 1.5 million Brazilians took part in the protests at their height.

Leftist leader Rousseff last week proposed a national pact with state governors to boost public services and guarantee a balanced budget.

A Datafolha poll showed that 68 percent of Brazilians back Rousseff’s proposals.

But that is no guarantee for its approval, and even less so in the swift timeframe sought by the president. She wants the reforms in place by October, the deadline for them to be applied in the general elections of October 5 of next year.

The ruling Workers Party has been seeking political reform for years, and there has been debate in the legislature albeit in vain.

The opposition is opposed to holding a referendum. It says Congress can approve changes by itself and that aiming for 2014 is too fast. It also says Rousseff should have contacted the opposition to discuss her plans.

Congress reserves the right to call a referendum and to implement any resulting political reforms.

Rousseff has a majority in the legislature but some sections of that broad support are not always loyal, especially since her approval rating has dropped 27 points because of the street protests.

The drop is also affecting mayors, governors, both allies and enemies of the president.

“When a ship looks like it is sinking, the rats are the first to jump off,” said Carlos Lupi, former leader of the Rousseff-allied Labor Party, indicating friends could start dumping the president.

Two major newspapers, including O Globo in Rio, criticized the president’s plans as too vague and said the government should take more concrete action like streamlining the country’s 39 ministries.

The electoral commission needs at least 70 days to convene a referendum, making September 8 the earliest possible date.

Tsagaan Khass, or White Swastika, whose leader has expressed reverence for Hitler, now says its main goal is to save nature

Reuters in Ulan Batorguardian.co.uk, Tuesday 2 July 2013 12.38 BST

A Mongolian neo-Nazi group has rebranded itself as an environmentalist organisation fighting pollution by foreign-owned mines, seeking legitimacy as it sends swastika-wearing members to check mining permits.

Tsagaan Khass, or White Swastika, has only 100 or so members but it is one of several groups – others have names including Dayar Mongol (Whole Mongolia), Gal Undesten (Fire Nation) and Khukh Mongol (Blue Mongolia) – that are linking nationalism and resources as foreign firms seek to exploit the mineral wealth of the vast country, landlocked between Russia and China.

Based in an office behind a lingerie store in the Mongolian capital, the shaven-headed, jackbooted Tsagaan Khass stormtroopers launch raids on mining projects, demanding paperwork or soil samples to be studied for contaminants.

"Before, we used to work in a harsh way, like breaking down doors," the group's leader, Ariunbold Altankhuum, 40, told Reuters. "But now, we have changed and we use other approaches, like demonstrations."On a patrol to a quarry two hours' drive from the capital, members wore black, SS-style Nazi uniforms complete with lightning flashes and replica Iron Crosses.

They questioned a mine worker about paperwork, opting to return in a week's time, when the owner had returned.

"Today our main goal is to save nature. We are doing things to protect the environment," Altankhuum said. "The development of mining is growing and has become an issue."

The group, founded in the 1990s, says it wants to halt pollution in the former Soviet satellite as foreign companies dig for gold, copper, coal and iron ore using cheap labour from China and nearby south-east Asia. But a lot of the pollution is caused by local, illegal miners working individually.

"We used to talk about fighting with foreigners, but some time ago we realised that is not efficient, so our purpose changed from fighting foreigners in the streets to fighting the mining companies," Altankhuum said.

Mongolians fear foreign workers are taking up scarce jobs in an economy where nearly 30% of the population lives below the poverty line, according to the Asia Development Bank.

"Mining is important because it's 90% of our economy," said the political commentator Dambadarjaa Jargalsaikhan. "But the unequal channelling of this revenue, the inequality in this country, that's the major issue."

Not helping the Tsagaan Khass environmental credentials among mainstream observers – apart from the uniforms – is Altankhuum's reverence for Adolf Hitler.

"The reason we chose this way is because what is happening here in Mongolia is like 1939, and Hitler's movement transformed his country into a powerful country," he said.

Because of comments such as that, some observers dismiss groups such as his as self-serving and irrelevant.

"Mongolia's neo-Nazis have been receiving too much attention from global media, and they've obviously been enjoying it," said Tal Liron, a PhD candidate at the University of Chicago who specialises in national identity. "They do not, however, represent Mongolians as a whole, any more than neo-Nazis in Britain represent the Brits.

"...Mongolians are cosmopolitan, savvy and perfectly capable of adapting many foreign ideologies and fashions to their context. For example, they have since 1990 thoroughly and vibrantly embraced representative democracy, just as they embraced socialism before 1990. I think that's the real story here: Mongolians are not and perhaps never were a remote, isolated people; and they're also quite capable of understanding irony, especially in regards to their contemporary condition."

Resource nationalism has been a major election issue in Mongolia, where the largest foreign investment is the Oyu Tolgoi project, which is 66% owned by global miner Rio Tinto and the rest by the government.

Oyu Tolgoi is expected to boost Mongolia's economy by about a third by 2020. Annual output in its first decade is expected to average 330,000 tonnes of copper and 495,000 ounces of gold.

But Rio has said since February it will not begin exports from the mine until it resolves disputes with Mongolia over royalties, costs, management fees and project financing.

"They are saying they have signed contracts on it and are giving some percentage of that to the people," Dorjgotov Purev-Ish, a 39-year-old manual labourer, told Reuters, describing government assurances of the advantages to flow from Oyu Tolgoi.

"But our family hasn't received any benefit."

The president, Tsakhia Elbegdorj, who wants more controls on foreign mining investment, won a second term last week despite concerns over the faltering economy and the growing role of foreign firms.

Colonel Tumenjargal Sainjargal of the national police department said the rightwing phenomenon began 15 years ago, when young people grew angry at the appearance of foreign languages on signs and made threats against business owners.

"They said it was too much, that it looked like a Chinatown," Sainjargal said.

"There are complaints that some foreign-invested companies hire Mongolian employees and cheat them, use violence, overwork them, or refuse to pay money owed to them. Afterwards, some of these Mongolians call the nationalist groups. There have been a few incidents with nationalists coming to companies for violent reasons to resolve the conflicts in their own way."

It seems unlikely Tsagaan Khass's new green thinking will be enough to repair its reputation after accusations of violence, such as shaving the heads of women it claimed were prostitutes serving foreign customers.

"We didn't shave the heads of the women, we just cut their hair," said Altankhuum. "But today we are changing. That was crude. That time has passed."

Their right hands rise to black-clad chests and flash out in salute to their nation: "Sieg heil!" They praise Hitler's devotion to ethnic purity.

But with their high cheekbones, dark eyes and brown skin, they are hardly the Third Reich's Aryan ideal. A new strain of Nazism has found an unlikely home: Mongolia.

Once again, ultra-nationalists have emerged from an impoverished economy and turned upon outsiders. This time the main targets come from China, the rising power to the south.

Groups such as Tsagaan Khass, or White Swastika, portray themselves as patriots standing up for ordinary citizens in the face of foreign crime, rampant inequality, political indifference and corruption.

But critics say they scapegoat and attack the innocent. The US state department has warned travellers of increased assaults on inter-racial couples in recent years – including organised violence by ultra-nationalist groups.

Dayar Mongol threatened to shave the heads of women who sleep with Chinese men. Three years ago, the leader of Blue Mongol was convicted of murdering his daughter's boyfriend, reportedly because the young man had studied in China.

Though Tsagaan Khass leaders say they do not support violence, they are self-proclaimed Nazis. "Adolf Hitler was someone we respect. He taught us how to preserve national identity," said the 41-year-old co-founder, who calls himself Big Brother.

"We don't agree with his extremism and starting the second world war. We are against all those killings, but we support his ideology. We support nationalism rather than fascism."

It is, by any standards, an extraordinary choice. Under Hitler, Soviet prisoners of war who appeared Mongolian were singled out for execution. More recently, far-right groups in Europe have attacked Mongolian migrants.

Not all ultra-nationalists use this iconography; and widespread ignorance about the Holocaust and other atrocities may help to explain why some do.

Tsagaan Khass points out that the swastika is an ancient Asian symbol – which is true, but does not explain the group's use of Nazi colours, the Nazi eagle and the Nazi salute; or the large picture of the Führer on Big Brother's cigarette case.

Nor does it seem greatly relevant, given their unabashed admiration for Hitler's racial beliefs.

"We have to make sure that as a nation our blood is pure. That's about our independence," said 23-year-old Battur, pointing out that the population is under three million.

"If we start mixing with Chinese, they will slowly swallow us up. Mongolian society is not very rich. Foreigners come with a lot of money and might start taking our women."

Big Brother acknowledges he discovered such ideas through the nationalist groups that emerged in Russia after the Soviet Union's fall; Mongolia had been a satellite state. But the anti-Chinese tinge is distinct and increasingly popular.

"While most people feel far-right discourse is too extreme, there seems to be a consensus that China is imperialistic, 'evil' and intent on taking Mongolia," said Franck Billé of Cambridge University, who is researching representations of Chinese people in Mongolia.

Hip hop tracks such as Don't Go Too Far, You Chinks by 4 Züg – chorus: "shoot them all, all, all" – have been widely played in bars and clubs. Urban myths abound; some believe Beijing has a secret policy of encouraging men to have sex with Mongolian women.

Yet Tsagaan Khass claims it welcomes law-abiding visitors of all races, and Big Brother can certainly be hospitable.

Enthusiastically shaking hands, he says: "Even though you are a British citizen, you are still Asian, and that makes you very cool."

He says the younger members have taught him to be less extreme and the group appears to be reshaping itself – expelling "criminal elements" and insisting on a good education as a prerequisite for membership. One of the leaders is an interior designer.

But critics fear ultra-nationalists are simply becoming more sophisticated and, quietly, more powerful. Tsagaan Khass say it "works closely" with other organisations and is now discussing a merger.

"Some people are in complete denial … [but] we can no longer deny this is a problem," said Anaraa Nyamdorj, of Mongolia's Lesbian, Gay, Bisexual and Transgender Centre.

The US state department has noted increased reports of xenophobic attacks since the spring. The UN country review cites a recent vicious assault on three young transgender women. When one of the victims publicly blamed an ultra-nationalist group – not Tsagaan Khass – death threats quickly followed.

"They are getting more support from the public," added Enkhjargal Davaasuren, director of the National Centre Against Violence, who fears that ultra-nationalists are growing more confident and victims too scared to come forward. She pointed to a YouTube video posted last year, showing a man roughly shaving a woman's long hair. The victim's face is buried in her hands, but her hunched body reeks of fear.

Others in Ulan Bator suggest the movement is waning and suspect the groups' menacing stance and claims of 3,000 members are bluster. Billé thinks there is "a lot of posturing".

"We have heard of instances [of violence]. They are not necessarily all right or all wrong," said Javkhlan, a Tsagaan Khass leader. But the group is simply a "law enforcement" body, he maintained: "We do checks; we go to hotels and restaurants to make sure Mongolian girls don't do prostitution and foreigners don't break the laws.

"We don't go through and beat the shit out of everyone. We check our information and make sure it's true."

They rely on police and media pressure to reform such businesses, he added. And if that failed? "We try to avoid using power," he said. "That would be our very last resort."

Environment groups claiming 1.5 million supporters have written to Prime Minister Kevin Rudd demanding he reject a push by business leaders and state governments to wind back federal environmental laws.

The Business Council of Australia and NSW Premier Barry O'Farrell have sought to use the change of prime minister to resurrect their campaign for the federal government to hand over environmental approval processes to the states in the interests of cutting "greentape".

But Australian Conservation Foundation executive director Don Henry said the whole notion of "greentape" was a furphy. "This is an agenda by mining and oil and gas industries to bulldoze their way through proper environmental laws," he said.

Henry and the heads of other environmental groups have written to Rudd, urging him to "hold the line" and not to revisit a plan considered and then abandoned by former prime minister Julia Gillard to hand over approvals to the states.

The environmental leaders said a group formed to fight the plan – the "Places We Love" alliance – had a combined supporter base of 1.5 million.

In the letter, Henry, World Wildlife Fund chief executive Dermot O'Gorman, Glen Klatovsky, acting national campaign director for The Wilderness Society and others claimed state governments could not be trusted with environmental protection.

"We have witnessed the continual erosion of environmental laws and protections by recently installed state governments. These attacks include gutting state environment departments with significant cuts to staff and resources, reductions in third-party rights and reduced oversight by environment portfolio ministers as decision-making powers are fast-tracked and handed solely to development ministers," they wrote.

"Increasingly we are seeing state governments demonstrating a blatant disregard for Australia's national and international obligations to the protection of biodiversity with our relatively small protected area estate under attack from governments ideologically opposed to nature conservation. You will no doubt be familiar with the recent activities of the Queensland government in this regard.

"... the Queensland, NSW, and Victorian governments are opening up national parks to a wide range of inappropriate uses and threatening even more. Queensland is winding back protection of rivers and bushland. If states are given powers under the Environment Protection and Biodiversity Conservation Act, they will be making key decisions that affect the very future of the Great Barrier Reef and Wet Tropical Rainforests, World Heritage listed National Parks, the Franklin River and Tasmanian World Heritage areas, Lake Eyre and the Murray Darling River System, and our threatened wildlife."

Rudd has also received a letter from O'Farrell saying if he was serious in his stated intention of rebuilding relationships with the business sector, then "streamlining" environmental approvals should be a high priority.

And the BCA, at a meeting with Rudd on Tuesday, put "greentape" reduction at the top of its list of desired policy changes.

The Coalition has promised to hand back environmental approvals to the states, under agreed guidelines.

New environment minister Mark Butler did not say whether the government was reconsidering the issue.

His office released a statement saying; "The Government is committed to working with state and territory governments to create a more efficient and effective environmental approval system, however we won't compromise on our high environmental standards."

The internet entrepreneur Kim Dotcom has exchanged caustic words with New Zealand's prime minister at a parliamentary committee hearing submissions on proposed changes to surveillance laws.

German-born Dotcom, who is being sought by the US to face charges of copyright infringement and money laundering, was the star attraction on the second day of hearings at the intelligence and security committee in Wellington, chaired by the prime minister, John Key.

Dotcom told the committee the proposed expansion of spying powers was "poorly timed considering the scandalous leaks concerning US mass surveillance of the world's population, including US allies". He urged New Zealand to repeat the "heroic stance" of the 80s when the country was declared nuclear-free.

"When a great power such as the United States is committing immoral and illegal practices, ranging from Guantánamo to torture to drone strikes, let alone mass surveillance against the entire world population, there has never been a greater need for New Zealanders to once again step forward and declare their values shall not be abandoned or suspended under pressure from the United States," he said.

Dotcom claimed he had evidence that Key, contrary to repeated public assurances, had been aware of his activities before a dramatic raid on the "Dotcom mansion" north of Auckland in January last year. "Oh, he knew about me before the raid. I know about that," said Dotcom, eyeballing Key. "You know I know."

The bill to amend the remit of the Government Communications Services Bureau (GCSB) was prompted by the admission that surveillance of Dotcom and a Megaupload colleague had been illegal. Their status as permanent residents of New Zealand meant the agency was prohibited from spying on them. Key issued a public apology to the men over the incident.John Key John Key at the hearing. Photograph: Marty Melville/AFP/Getty Images

The new bill, which would make it lawful for the GCSB to spy on permanent residents on behalf of domestic agencies, has attracted wider interest following the revelations of the scope of surveillance undertaken by the US and its partners, as leaked by Edward Snowden to the Guardian.

The GCSB is a partner in the information-sharing Echelon or "five-eyes" group, led by America's National Security Agency and including Britain's GCHQ. Key says the Echelon arrangement has never been used to circumvent domestic law by spying on New Zealanders.

In an interview with the TV3 Campbell Live programme after the hearing, Dotcom grinned when asked whether he had been in touch with Snowden. "I do not know Edward Snowden personally, and that's all I want to say about this," he said.

The attempt to extradite Dotcom in relation to the activities of his Megaupload file-locker site has become mired in a succession of legal challenges, and is now unlikely to be heard any earlier than April 2014.

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Kim Dotcom lambasts 'largest data massacre in the history of the internet'

Hosting provider says it stored data for a year with 'nobody showing interest' before reprovisioning for other customers

Stuart Dredge guardian.co.uk, Thursday 20 June 2013 09.56 BST

Megaupload founder Kim Dotcom has attacked the internet-hosting company LeaseWeb after it wiped data from 630 servers that were used by his online storage service before it was shut down in January 2012.

Dotcom raged against LeaseWeb's decision in a series of tweets starting on Wednesday afternoon, suggesting in characteristically bombastic style that "this is the largest data massacre in the history of the internet".

He went on to claim that LeaseWeb had wiped the former Megaupload servers on 1 February 2013, but waited several months before informing Dotcom yesterday of its actions.

"Millions of personal #Megaupload files, petabytes of pictures, backups, personal & business property forever destroyed by #Leaseweb," tweeted Dotcom, who contrasted LeaseWeb's actions with those of Carpathia, another of Megaupload's hosting providers.

"While #Carpathia has chosen to store #Megaupload servers in a warehouse to protect the data from destruction #Leaseweb has done the opposite."

Dotcom also claimed Megaupload's lawyers had repeatedly asked LeaseWeb not to delete the data while he continues to fight against extradition to the US after his arrest in January 2012, after the FBI accused him of earning $175m in illegal profits through filesharing on Megaupload.

LeaseWeb tells a different story. The company's senior regulatory counsel, Alex de Joode, responded to Dotcom's accusations with a blogpost that refutes the claim that it ignored requests from Megaupload's legal team.

"For clarity, these servers were not owned by MegaUpload, they were owned by LeaseWeb. For over a year these servers were being stored and preserved by LeaseWeb, at its own costs. So for over one whole year LeaseWeb kept 630 servers available, without any request to do so and without any compensation," wrote de Joode.

"During the year we stored the servers and the data, we received no request for access nor any request to retain the data. After a year of nobody showing any interest in the servers and data we considered our options. We did inform MegaUpload about our decision to re-provision the servers."

De Joode confirmed that this reprovisioning had begun in February 2013. "We absolutely regret the setbacks Kim Dotcom has had since MegaUpload was taken offline, but we hope he as an entrepreneur will understand our side of the story and the decisions deliberately taken."

But Dotcom tweeted: "Who believes this crap?" after reading LeaseWeb's blogpost. "Our legal team and @EFF have written several data preservation demands to #Leaseweb. We were never warned about the deletion."

He added that he was considering taking legal action against LeaseWeb in its native Netherlands. The company could also face lawsuits from Megaupload users whose data was wiped from the servers.

Time will tell whether LeaseWeb's actions have an impact on the ongoing criminal prosecution of Dotcom, but the latest twist has provided further fuel for his suspicions of a conspiracy. "The FBI seized all my data and hasn't given me a copy yet. And now my backups on #Megaupload are gone too. How convenient."

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Megaupload founder Kim Dotcom closer to extradition following ruling

US does not have to hand over all its evidence against Dotcom and three colleagues, says appeals court in New Zealand

US prosecutors have won a court case that brings them a step closer in their attempts to have the Megaupload founder and three of his colleagues extradited from New Zealand.

The appeals court in Wellington overturned an earlier ruling that would have allowed Kim Dotcom and the others broad access to evidence in the case against them at the time of their extradition hearing, which is scheduled for August. The four are accused of facilitating massive copyright fraud through the internet filesharing site.

The court ruled that extensive disclosure would bog down the process and that a summary of the US case would suffice.

Dotcom, a German national, says he is innocent and cannot be held responsible for others using the site to illegally download songs and films. Along with him, US prosecutors are seeking the extraditions of Finn Batato, Mathias Ortmann and Bram van der Kolk, each of whom held senior positions at Megaupload before American authorities shut the site down in 2012.

Paul Davison, one of Dotcom's lawyers, said he planned to appeal at New Zealand's supreme court. Dotcom's legal team must first submit an application to the court which will then decide whether an appeal has enough merit to proceed.

In its ruling the appeals court found that full disclosure of evidence was not necessary at the extradition hearing because the hearing was not the venue to determine guilt or innocence. The court pointed out that the legal obligation on the US was simply to prove it had a valid case.

The court also found that extradition treaties are essentially agreements between governments and "even though courts play a vital part in the process, extradition is very much a government to government process".

Davison said it was vital that Dotcom had access to a wide range of documents including those that could be detrimental to the US case. The lawyer said that would help prove there was no merit to the case.

The extradition hearing has already been postponed from March to August owing to the legal wrangling. It could be postponed further should the supreme court decide to hear the next planned appeal.

Dotcom remains on bail pending the hearing. In January, on the anniversary of his arrest, he launched a new filesharing site called Mega.

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Kim Dotcom's Mega to expand into encrypted email

Internet entrepreneur fighting extradition from New Zealand says file storage service now has more than 3 million users

Charles Arthur guardian.co.uk, Tuesday 26 February 2013 12.57 GMT

Kim Dotcom, the German-born internet entrepreneur fighting extradition from New Zealand over US claims of "criminal" copyright infringement, says he plans to launch an end-to-end encrypted email service to go with his Mega encrypted file storage offering.

Speaking from New Zealand via a Skype video link to London, Dotcom said that his new Mega file storage service which launched in January now has more than 3 million registered users who have stored a total of 125m files in the first month of operation.

"It took [US cloud storage company] Dropbox two years to achieve that," Dotcom, 39, said. "We can see really high demand for this storage."

Next, he said, "we're going to extend this to secure email which is fully encrypted so that you won't have to worry that a government or internet service provider will be looking at your email."

Dotcom is trying to overturn demands by the US government for him to be extradited from New Zealand, where he lives with his wife and children, to the US to face criminal charges relating to the operation of his MegaUpload service – which was shut down in January 2012 when New Zealand police arrested him and other staff from the company.

At the time, Dotcom's assets were seized – and he said on Tuesday that he is still struggling to have them unfrozen, meaning that his legal team has gone unpaid for the past year. "I have the best legal team money can't buy," he said.

He accused the US government of "hacking its law" by ignoring its own legislation. He said that the MegaUpload service, which allowed people to upload, share and stream files, had obeyed the US's Digital Millennium Copyright Act (DMCA): "the DMCA was supposed to protect us and give us safe harbour" if users uploaded copyrighted files. "But they went after that and took us down."

But speaking in London on Tuesday, Frances Moore, the chief executive of the IFPI which represents record labels internationally, said that the move against MegaUpload had had a positive effect: "Action by governments and courts have had a major impact and cloud locker services have seen a major reduction in traffic since the action against Kim Dotcom."

Dotcom said be believed that Aaron Swartz, the internet activist who committed suicide ahead of a trial hearing in which a state prosecutor was seeking a jail term for the copying of files from the JSTOR scientific service, had become a "political target" after helping organise opposition to the Stop Online Piracy Act (Sopa) early in 2012. "If you look at the charges against this young genius, they were a complete overreach of the law," he said. "JSTOR said there was nothing wrong. I think there was a political desire to destroy the life of this young man."

Dotcom said that the MegaUpload service had been heading for a stock market flotation six months after the raid that closed it, and rubbished suggestions by the US government that MegaUpload was a "criminal enterprise". "I don't know of any examples of any criminal organisation that had ambitions to be a public company," he said.

Dotcom – formerly known as Kim Schmitz – has previously run foul of financial authorities over his stock market dealings with other companies. In 2001 he bought €375,000 worth of shares in Letsbuyit.com, a near-bankrupt Swedish collective buying business, and said he would put €50m into it. That saw the shares jump in value, and he sold the shares at a €1.5m profit. He was subsequently convicted in 2002 of embezzlement.

In January 2011 he was fined HK$8,000 by the Hong Kong Securities and Futures Commission for failing to declare a shareholding in various companies there, but by that time had been granted residency in New Zealand – where documents obtained by the Associated Press in March 2012 showed immigration officials felt the "economic contribution" he could make to New Zealand outweighed "negative aspects" from his previous convictions.

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Kim Dotcom: the internet cult hero spoiling for a fight with US authorities

German-born former hacker says his eyes have been opened to US tactics after his Megaupload site was shut down last year

In massive, swaggering capital letters, "Mega" stretches across the grassy slope in front of Dotcom Mansion. A huddle of electricians and carpenters are removing the wooden stencils and wiring in the fluorescent tubes. They are up to G. All around the vast grounds of Kim Dotcom's luxury home just north of Auckland, New Zealand, gardeners and technicians are busy, like Oompa-Loompas at the Chocolate Factory, setting up for the big night, overlooked by life-size inflatable giraffes and hippos.

On Sunday, almost a year after the internet entrepreneur and several of his associates were arrested in a spectacular dawn raid on the mansion, about 200 invited guests will gather at the opulent estate for the launch of Mega. The new cyberlocker service is a simplified, super-encrypted successor to Megaupload, the file-sharing site that once reputedly accounted for 4% of all internet traffic, and which US prosecutors had taken offline moments before the helicopters descended in New Zealand a year ago.

After spending almost a month in prison in early 2012, Dotcom and his co-accused were awarded bail – the first of a series of court victories that have left the prosecution case looking increasingly wobbly. With any hearing for extradition to the US to face criminal copyright charges having been pushed back, it is hard not to see the extravagant unveiling of the new site as a two-finger gesture aimed at US authorities.

"I don't see it like that," says Dotcom, sitting at the head of a 20-metre-long table out the back of the house, flanked by two of his lawyers and his co-accused colleague Finn Batao – all glued to iPads and laptops. The German-born tycoon is clearly more than willing to be cast as the courageous leader of a crusade against the dinosaurs of Hollywood and the politicians who enable their obsolete ways of doing business.

"We want to show the world that we are innovators. We want to show the world that cloud storage has a right to exist. And, of course, when you launch something like this, you can expect some controversy. The content industry is going to react really emotionally about this. The US government will probably try and destroy the new business … you've got to stand up against that, and fight that, and I'm doing that … I will not allow them to chill me."

The series of setbacks to the prosecution case has prompted speculation that the extradition hearing itself may never be heard – a scenario that Dotcom, who turns 39 next week, says he would regret. "We want to expose what has happened here. We have a lot of information that shows the political interference. We feel that what happened here was manufactured to destroy Megaupload, and we want to show that."

The case against Dotcom and his allies rests on proving that they were profiting, knowingly and willingly, from the illegal sharing of copyright-protected material – in effect, that the exchange of pirated goods was part of the Megaupload business model. "That's complete bullshit. Excuse my language, but that's just crap," says Dotcom.

"Megaupload was created initially as a service that allows you to send large files because email attachments had limitations … and that's still the case today. The popularity and initial growth was all around that. This was never set up with the intent to be some kind of piracy haven. If the US government says that we are a mega-conspiracy, a mafia that has created this kind of thing to be a criminal network of pirates, they're completely wrong … for them it was about shutting it down and dealing with it later on the fly. They are hacking the legal system."

And Dotcom knows a hacker. During what he has called his "young and stupid" years in Germany he was convicted for computer hacking, and later took a plea deal and a probation sentence over insider trading charges, though he maintains he was "actually saving a company and over 120 jobs". The conviction was subsequently wiped from his record under German clean-slate legislation.

Back then, Dotcom "thought of myself as more American than Americans", he says. "I always had this attitude of can-do, and if you're successful you can show it, which is a very un-German thing, you know. And now, in hindsight, looking at this, the US has lost a lot of its flair for me. It's becoming such an aggressive state."

After a year in which the Megaupload dispute has become one of the most prominent and colourful talking points in the debate over "internet freedom", Dotcom himself has, he says, had his eyes opened. "When you live in your happy bubble and you have everything you desire and you live a great life, you don't think about all the nasty shit that is happening. I have a much better understanding now of how the US government operates and how much spying is actually going on, how much privacy intrusion is the reality today … we are very close to George Orwell's vision becoming a reality."

In Dotcom's telling of the story, his travails began when the Motion Picture Association of America hired the veteran former senator Chris Dodd, who used his sway over his longtime ally the vice-president, Joe Biden, to encourage a move on Megaupload. "If you connect all the dots, and you see who the operators are behind all of this, you understand the political scope," he says.

"They had a political agenda, plus they had an upcoming election, and they needed an alternative for Sopa," says Dotcom, in a reference to the ill-fated and draconian Stop Online Piracy Act.

"It would probably have looked very bleak for [Obama] to go to Hollywood and ask them to help him get re-elected when he couldn't make Sopa happen for them. So Megaupload became a plan B."

Meanwhile, says Dotcom, an aggressive and outdated approach in Hollywood blinkers them from the potential to build a new business model around the internet. "There's so much money to be made, and those fools don't get it. They just don't get it."

While reluctant to talk in detail about the case of Aaron Swartz, the Reddit co-founder who killed himself last week after what some have claimed was disproportionate behaviour by prosecutors over a hacking case, there are "similarities in the way we have been prosecuted", says Dotcom. "Over-reaching abuse of power, no due process, just completely insane."

And he sees a similar pattern in the treatment of WikiLeaks. "I think Julian Assange's fear, that the Swedish government is co-operating with the US government and that there might be an attempt to extradite him from Sweden, is very real. So I sympathise with him. I see also similarities and abuses that are happening in the case against WikiLeaks that were happening to us."

The technologist formerly known as Kim Schmitz – and Kimble, and Kim Tim Jim Vestor, and His Royal Highness King Kimble the First – has attained a strange cult hero status in his adopted home, New Zealand. He arrived in 2009 after six years in Hong Kong, to provide his family – he and his wife Mona have five children – with a greener environment than that offered by the "concrete jungle".

The saga has also turned into a domestic political sinkhole. A rightwing government-supporting MP has seen his political career compromised, probably fatally, by revelations of undisclosed donations from Dotcom to an earlier mayoral campaign. Later, and more gravely, the prime minister was forced to apologise after accepting Dotcom had been illegally spied on.

With the Americans on the "warpath", says Dotcom, there seems little chance of the dispute ending amicably. But, he insists, swatting a fly away from his forehead, he remains open to talks.

"I'm not evil, you know? I'm a good guy. Everyone who knows me likes me … they should really come to the table, come to their senses and work this out. Because I'm not going to cave in. I'm going to fight this thing. And there's no way in hell that they have any chance to win this. I don't see it. I don't see it because I know I'm innocent, and the lawyers know I'm innocent, and we have right on our side."

DHAKA, Bangladesh — Not even two months after the collapse of the Rana Plaza factory building claimed more than 1,100 lives, a team of engineers arrived to assess another factory in the center of the capital. It was named Al-Hamra Garments, and it was one of hundreds of factories undergoing post-disaster inspections as Bangladesh sought to prove that its critical apparel industry was safe.

But this inspection, conducted in mid-June, was startling. The two engineers discovered that the eight-story factory was partly propped up by temporary cast-iron pillars placed on the ground floor. Several original beams and columns were cracked or disintegrating. And the factory was open for business, with more than 1,000 workers producing clothing for a Bangladeshi apparel conglomerate whose customers include Walmart and Gap.

“Considering the severity of the building condition it is recommended that the use of the building be discontinued immediately,” the two inspectors, professors at the country’s top engineering college, concluded in their preliminary assessment report.

Yet last Saturday, nearly two weeks after the inspection, Al-Hamra Garments was still open. “The factory is fine,” said an administrator, Shafiul Azam Chowdhury, on Saturday afternoon. He said two other inspection teams had concluded that the temporary propping made the building safe enough to continue operations during structural repairs.

“No problem,” he added in a telephone interview.

Bangladesh’s garment industry, now the world’s second-leading clothing exporter, after China’s, is still struggling to recover from the April 24 collapse of Rana Plaza, the deadliest disaster in the history of the industry. To address concerns about unsafe buildings, government officials and industry leaders called for inspections to ensure the structural integrity of the country’s 5,000 garment factories.

But two months after the collapse, the inspections process is disorganized and haphazard, with unclear lines of authority. The Ministry of Textiles is overseeing some inspections. An industry trade group is organizing others. The local development authority in Dhaka is involved, and the country’s top engineering school is playing a central role. Some global brands have also sent inspection teams.

The situation at Al-Hamra Garments underscores the confusion. On Saturday, after a reporter for The New York Times visited the ground floor of the factory and began making inquiries, factory officials and the building’s owner initially defended the decision to remain open. But late that night, company officials reversed course. The next morning, they closed the factory.

“We reviewed all the reports, and our managing director decided to close it,” Mr. Chowdhury said in a later telephone interview. “We were in a dilemma about what was to be done.”

It was unclear what clothing was being made inside Al-Hamra Garments, but the factory is owned by one of Bangladesh’s leading apparel conglomerates, the Palmal Group. Palmal has at least 23 factories and has been praised by Gap and Walmart as a top supplier, according to the company’s Web site.

Inspecting Bangladesh’s garment factories is an acutely complicated task. No government agency is certain of precisely how many such factories operate in Bangladesh, or where they are. Some inspectors are discovering that building plans filed with government agencies do not always match the actual buildings. Many factories built during the 1980s and 1990s have no architectural drawings at all.

Critics often blame this lack of regulation on Dhaka’s development authority, known as Rajuk. Last week, the authority’s director told members of Bangladesh’s Parliament that roughly 8,000 buildings in Dhaka, the national capital, lacked required approvals or violated construction codes. In a later interview, the authority’s chief engineer blamed part of the problem on manpower: Rajuk has only 40 inspectors to oversee a million structures in Dhaka.

“Impossible,” said the chief engineer, Mohammed Emdadul Islam, noting that plans to expand to 240 inspectors are still not sufficient.

After the Rana Plaza disaster, there was a rush to inspect factories. The Bangladesh Garment Manufacturers and Exporters Association, a leading industry trade group, quickly hired a staff of 10 engineers and announced that 19 factories had been closed during inspections.

But the inspection process quickly took on an ad hoc quality. One factory executive complained of submitting to inspections from five different entities. Most factories have not yet been inspected at all. Some brands have sent their own inspection teams, including Tesco, the British retailer, which stopped placing orders at one local garment maker, Liberty Fashions, after the chain’s inspectors found structural problems in the factory — a finding angrily disputed by the factory’s Bangladeshi owner.

Meanwhile, reports in the Bangladeshi media about cracks in various factories have fueled fear and anger among workers. Last week, hundreds of people demonstrated in the industrial suburb of Savar after local officials closed their building, Razzak Plaza, in response to a local television report about cracks in the structure’s rooftop canteen

The crowd blocked the main road and grew increasingly agitated as a local official pleaded for patience. The scene was unfolding less than a mile from the site of Rana Plaza.

“Do we want another Rana Plaza disaster?” the local official shouted.

To lead the inspections effort, the Bangladesh government, as well as industry leaders, are leaning on a small group of professors at the country’s leading engineering program, the Bangladesh University of Engineering and Technology. Yet the school has only 30 professors who are experts in structural and geophysical engineering, meaning the inspections process is moving slowly, especially since the professors must continue with their teaching loads.

Mohammed Mujibur Rahman, chairman of the civil engineering department, said the university’s inspection teams had so far assessed about 100 buildings, including 66 containing one or more garment factories. Dhaka is estimated to have between 1,500 and 2,000 garment factories.

“It is ultimately the government that should ensure the buildings are safe,” Mr. Rahman said, noting that the university, “as an institution, doesn’t have that capacity.”

Still, Mr. Rahman said his staff considered the inspections its duty and was working around the clock. He declined to identify which factories his teams had inspected but said defects were widespread, ranging from superficial cracks to more serious damage to columns and beams.

Inspection teams recommended that two buildings be closed because of risk of collapse. The Times later confirmed that the Al-Hamra Garments building was one of them and obtained a copy of the inspection report from a third party.

The building, in the crowded center of Dhaka, went up about 20 years ago. It is divided into two sections: a five-story wing that contains two cinemas and an eight-story building that houses Al-Hamra and another factory, Amazan Garments, also owned by the Palmal Group.

In response to the Rana Plaza collapse, officials at Palmal say, the company hired a leading local engineering firm, Shaheedullah and New Associates Ltd., to inspect all its factories. When problems were discovered at the Al-Hamra site, the Shaheedullah firm determined that the columns supporting about a third of the factory needed reinforcement. The firm then installed the temporary iron props and commenced with repairs.

“Now the above garments factory is safe from immediate collapse under all vertical loads,” the firm stated in a report provided to Al-Hamra officials.

On the same day, the Bangladesh garment trade group also sent an inspection team, which surveyed the temporary support beams and concluded that the building was “safe for garment operations” as the structural repairs continued.

But the two-person team from the engineering university made a visual inspection and drew a starkly different conclusion. It found a “large number” of “severely disintegrated” columns. Other columns or beams had serious cracks. It also found design problems, reporting that in some areas, “framing with beams and columns were absent.”

“The structure of the building needs immediate measures to counter the possible total failure and total collapse of the building,” the university inspection report stated.

Asked about these findings, the building’s owner, Shafi Bikrampuri, initially argued that the three inspection reports were consistent. “They said it was not dangerous,” he said, indicating he was not aware of the details of the university report. “No danger, nothing.”

By Saturday night, though, Mr. Bikrampuri and officials at Al-Hamra Garments had changed their minds. “Because of the conflicting reports and opinions from the multiple organizations involved,” Mr. Chowdhury said in a statement, “we were at a dilemma to reach an educated decision.”

On Sunday morning, the factory was closed, with a notice telling workers that wages would still be paid. The company has hired yet another inspection team to conduct a comprehensive assessment.